Investors in the European financial sector are scrambling to establish how much banks have pledged in credit lines to so-called "conduits" after Sachsen LB became the second German bank to be rescued amid turmoil in the credit markets.

The German savings banks association had to take over a €17.3 billion ($23.4 billion) credit facility Sachsen LB had pledged to one of its special investment funds, or conduits, late on Friday.

The conduit, Ormond Quay, borrowed in the short-term commercial paper market and invested in asset-backed securities, avoiding them appearing on Sachsen's balance sheet.

The rescue was triggered when commercial paper investors refused to refinance Ormond Quay and Sachsen was unable to provide the credit it had pledged.

The collapse may raise questions about the German banking system as it came just a week after the bank said it had "sufficient liquidity" and days after the Bundesbank said the failure of IKB, the German bank bailed out three weeks ago, was an "isolated incident".

It is likely to trigger fresh concern about European banks' exposure to the credit market via credit lines to conduits, which face their own liquidity crunch in the asset-backed commercial paper market. More than 30 European banks run conduits worth about $500 billion, according to Moody's Investors Service, the credit rating agency.

The banks include Britain's HBOS, ABN Amro of the Netherlands, France's BNP Paribas and several German Landesbanks.

Jackie Ineke, of Morgan Stanley, said large banks would be able to take the conduits on to their balance sheets. Smaller banks may face particular scrutiny. Sachsen LB sponsored the whole €17.3 billion of the Ormond Quay conduit while IKB had extended about half of the credit lines to its conduit.